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More trouble for stalled 35th/Avalon (and others) owner Mastro

One of the most recent citywide-media reports about developer Michael Mastro – forced into Chapter 7 bankruptcy proceedings, with properties including the half-done 35th/Avalon building as well as Harbor Ave land and the West Water condo conversion – focused on his “Friends and Family” investors. That’s what appears to be at the heart of charges just announced by the state – read on for the news release:

The Washington State Department of Financial Institutions (DFI) Securities Division has issued a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Revoke Exemptions and Impose a Fine against King County resident Michael Robert Mastro in connection with the sale of promissory notes to investors.

DFI intends to order Mastro to cease violations of state laws requiring the registration of securities for sale and registration of persons offering securities. DFI’s Securities Division also seeks to order Mastro to cease violations of anti-fraud laws and to revoke the use of exemptions from securities registration. DFI is also seeking a fine of $100,000, subject to prior repayment of the investors.

Mastro, a real estate developer doing business as Mastro Properties for more than 20 years, raised capital for his various business operations by selling promissory notes to investors at interest rates ranging from 8 to 12 percent. Mastro may have raised more than $100,000,000 through the sale of these notes to more than 175 investors.

DFI alleges that Mastro failed to register the offer and sale of the promissory notes in violation of the registration provisions of the Securities Act of Washington and failed to register as a securities broker-dealer or salesperson.

DFI’s Securities Division alleges that Mastro violated state securities anti-fraud laws because he:
· Failed to disclose material facts, such as:
· The intended use of the investment proceeds;
1 Personal or business financial information about himself;
2 The risks of the investments;
3 The liquidity risks of the investments; and
4 Adverse changes in his financial circumstances.
· Caused some investors to believe that their investments would be protected by his insurance policies; and
· Caused some investors to believe that their investments would be protected by deeds of trust or UCC-1 filings on personal property.

“I encourage investors to investigate before investing — in other words, check with DFI’s Securities Division to verify whether an investment is registered and that they are dealing with a licensed and registered seller,” DFI Director of Securities Michael Stevenson said. “Registered investments accompanied by a disclosure document can greatly assist investors in making an informed decision.”

I live just down the street from 35th and Admiral. Seems like if they don’t get siding on this project soon it could be a total loss. Not sure of what will happen but it would be a waste of rescources at this point to not at least finish the outside.

Interestingly, at the end of that PSBJ story is a link to another stalled project that has left a hole like our (W)hole. Starwood was going to build on 2nd & Pine, but mothballed it until the economy is better. It’s taken 2 years, but applaud them for deciding to fill it in so that it looks better in the meantime.

I’m with Benjamin.
IMO,
it would be an additional crime to allow the building that has been put in place to become degraded thru neglect caused by the legal maneuvers that are going to be played.
Isn’t there some kind of ‘vulture fund’ that can supply funds to an impartial 3rd party that could finish out the project?
The jobs would be desirable, as would a nice set of new, occupied living spaces.
Certainly better than a rotting hulk; a vandal lure and firetrap.

You’re kidding me GH1, they are going to fill in the excavation at 2nd & Pine until they can start the project again!? That seems like an incredible waste of resources.
So it sounds like they spent all that time, money, and resources to excavate a hole where there was once a parking lot, and now they will spend a lot of time, money, and resources to fill it in to grade and do what? Cover it with pavement and create a parking lot? Farking ridiculous!!

(Common loon in winter plumage, photographed by Mark Wangerin) Lots of good cheer - and some community involvement too - in our highlights for the rest of today/tonight, from the WSB West Seattle Holiday Guide and Event Calendar: COCOA CRIS CRINGLE: 4-8 pm photo sessions at Easy Street Records, rais...